Segment and Geographic Information

6 Months Ended

Jul. 31, 2020

Segment Reporting [Abstract]

Segment and Geographic Information

NOTE 19 – SEGMENT AND GEOGRAPHIC INFORMATION

The Company conducts its business in two operating segments: Watch and Accessory Brands and Company Stores. The Company’s Watch and Accessory Brands segment includes the designing, manufacturing and distribution of watches and, to a lesser extent, jewelry and other accessories, of owned and licensed brands, in addition to revenue generated from after-sales service activities and shipping. The Company Stores segment includes the Company’s physical retail outlet locations. The Chief Executive Officer of the Company is the chief operating decision maker (“CODM”) and regularly reviews operating results for each of the two operating segments to assess performance and makes operating decisions about the allocation of the Company’s resources.

The Company divides its business into two major geographic locations: United States operations, and International, which includes the results of all non-U.S. Company operations. The allocation of geographic revenue is based upon the location of the customer. The Company’s International operations in Europe, the Middle East, Asia and the Americas (excluding the United States) accounted for 39.6%, 11.3%, 7.1% and 2.7%, respectively, of the Company’s total net sales for the three months ended July 31, 2020. For the three months ended July 31, 2019, the Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 32.0%, 9.7%, 9.0% and 6.6%, respectively, of the Company’s total net sales. The Company’s International operations in Europe, the Middle East, Asia and the Americas (excluding the United States) accounted for 38.8%, 8.0%, 7.7% and 5.5%, respectively, of the Company’s total net sales for the six months ended July 31, 2020. For the six months ended July 31, 2019, the Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 33.1%, 9.2%, 9.1% and 7.1%, respectively, of the Company’s total net sales.

Operating Segment Data as of and for the Three Months Ended July 31, 2020 and 2019 (in thousands):

	Net Sales
	2020		2019
Watch and Accessory Brands:
Owned brands category	$	31,622	$	56,690
Licensed brands category		46,414		77,486
After-sales service and all other		153		2,630
Total Watch and Accessory Brands		78,189		136,806
Company Stores		10,349		21,010
Consolidated total	$	88,538	$	157,816

	Operating (Loss)/Income (3)
	2020			2019
Watch and Accessory Brands	$	(9,945	)	$	5,698
Company Stores		1,029			3,078
Consolidated total	$	(8,916	)	$	8,776

Operating Segment Data as of and for the Six Months Ended July 31, 2020 and 2019 (in thousands):

	Net Sales
	2020		2019
Watch and Accessory Brands:
Owned brands category	$	56,983	$	108,609
Licensed brands category		82,098		150,281
After-sales service and all other		2,394		9,411
Total Watch and Accessory Brands		141,475		268,301
Company Stores		16,729		36,064
Consolidated total	$	158,204	$	304,365

	Operating (Loss)/Income (3)(4)(5)
	2020			2019
Watch and Accessory Brands	$	(189,566	)	$	8,793
Company Stores		(1,513	)		4,957
Consolidated total	$	(191,079	)	$	13,750

	Total Assets (1)
	July 31, 2020		January 31, 2020		July 31, 2019
Watch and Accessory Brands	$	618,419	$	782,339	$	772,653
Company Stores		61,270		64,969		67,978
Consolidated total	$	679,689	$	847,308	$	840,631

(1) The decrease in total assets of the Watch and Accessory Brands segment at July 31, 2020 from January 31, 2020 is due primarily to the impairment charges related to goodwill of $133.7 million and $22.2 million related to intangible assets.      

Geographic Location Data as of and for the Three Months Ended July 31, 2020 and 2019 (in thousands):

	Net Sales				Operating (Loss)/Income (3)(5)
	2020		2019		2020			2019
United States (1)	$	34,766	$	66,529	$	(14,319	)	$	(3,251	)
International (2)		53,772		91,287		5,403			12,027
Consolidated total	$	88,538	$	157,816	$	(8,916	)	$	8,776

United States and International net sales are net of intercompany sales of $29.1 million and $91.0 million for the three months ended July 31, 2020 and 2019, respectively.

Geographic Location Data as of and for the Six Months Ended July 31, 2020 and 2019 (in thousands):

	Net Sales				Operating (Loss)/Income (3)(4)(5)
	2020		2019		2020			2019
United States (1)	$	63,300	$	126,023	$	(134,309	)	$	(12,203	)
International (2)		94,904		178,342		(56,770	)		25,953
Consolidated total	$	158,204	$	304,365	$	(191,079	)	$	13,750

United States and International net sales are net of intercompany sales of $71.9 million and $168.9 million for the six months ended July 31, 2020 and 2019, respectively.

(1) The United States operating loss included $6.1 million and $4.1 million of unallocated corporate expenses for the three months ended July 31, 2020 and 2019, respectively. The United States operating loss included $12.1 million and $13.1 million of unallocated corporate expenses for the six months ended July 31, 2020 and 2019, respectively.  

(2) The International operating income included $11.2 million and $14.8 million of certain intercompany profits related to the Company’s supply chain operations for the three months ended July 31, 2020 and 2019, respectively. The International operating (loss)/income included $22.3 million and $27.8 million of certain intercompany profits related to the Company’s supply chain operations for the six months ended July 31, 2020 and 2019, respectively.

(3) For the three months ended July 31, 2020 and 2019, and for the six months ended July 31, 2020 and 2019, in the United States locations of the Watch and Accessory Brands segment, operating loss included a charge of $0.3 million, $1.1 million, $1.0 million and $2.6 million, respectively, related to the amortization of intangible assets, deferred compensation and certain acquisition accounting adjustments associated with the MVMT brand. In addition, in the International locations of the Watch and Accessory Brands segment for the three months ended July 31, 2020 and 2019, and for the six months ended July 31, 2020 and 2019, operating (loss)/income included, $0.7 million and $1.4 million, respectively for both periods, of expenses primarily related to the amortization of acquired intangible assets, as a result of the Company’s acquisition of the Olivia Burton brand.  

(4) For the six months ended July 31, 2020, in the United States locations of the Watch and Accessory Brands segment, operating loss included a charge of $99.7 million, related to the impairment of goodwill and intangible assets associated with the MVMT brand. In addition, in the International locations of the Watch and Accessory Brands segment, for the six months ended July 31, 2020, operating loss included a charge of $56.2 million related to the impairment of goodwill associated with the Olivia Burton brand and City Time Joint Venture.

(5) For the three months ended July 31, 2020, in the United States locations and the International locations of the Watch and Accessory Brands segment, operating loss included a charge of $6.6 million and $0.8 million, respectively, related to the corporate initiatives that the Company took in response to the impact on its business due to the COVID-19 pandemic. For the six months ended July 31, 2020, in the United States locations and the International locations of the Watch and Accessory Brands segment, operating loss included a charge of $11.3 million and $3.3 million, respectively, related to the corporate initiatives that the Company took in response to the impact on its business due to the COVID-19 pandemic.

	Total Assets (1)
	July 31, 2020		January 31, 2020		July 31, 2019
United States	$	313,411	$	425,018	$	397,502
International		366,278		422,290		443,129
Consolidated total	$	679,689	$	847,308	$	840,631

(1) The decrease in the United States total assets at July 31, 2020 from January 31, 2020 is primarily due to the impairment charges related to goodwill of $77.5 million and $22.2 million related to intangible assets. The decrease in the International total assets at July 31, 2020 from January 31, 2020 is primarily due to the impairment charge related to goodwill of $56.2 million.          

	Property, Plant and Equipment, Net
	July 31, 2020		January 31, 2020		July 31, 2019
United States	$	16,825	$	18,852	$	18,793
International		9,063		10,386		9,455
Consolidated total	$	25,888	$	29,238	$	28,248